i'm becky quick reporting live from the nasdaq in times square this morning. andrew ross sorkin is back at cnbc's headquarters along with brian sullivan sitting in for morning, gopro pricing its ipo at $24 a share. that came in at the high end of expected $24 a range. gopro is the first consumer electronics company to ipo since the 201 1 debut of headphonesmaker skull candy. the company is expected to start trading on the nasdaq today under the symbol gpro. we'll be talking to gopro's founder nick woodman coming up at 8:30. woodman and his family are the company's biggest shareholders with the stake of 39%. he'll be joining us for a while just to talk about the cameras, where they plan to go from here, some of what you could be speccing. >> and i think you have a gopro camera there on set with you, don't you? >> no.

you have one on set with you, i think. >> we have one on set here. we've been playing with this for the past few days. >> looking up your noses? >> looking up our noses. i thought i saw one on a stick over where you are. am i wrong? >> is there a gopro around here on a stick? oh, yeah, you're right. yeah, you're right. you know more than i do about was going on. >> this thing will be live on show? that's dangerous. >> it is. this camera is dangerous. >> i actually one of these, by the way. i own two of them. >> i own one, too. >> what do you do with them, put them in your race car? >> exactly. they're in my race car. they're tough. i'll give the gopros credit. >> we'll be talking a lot about gopro during the rest of the program. in other news right now, new york attorney general eric schneiderman who becky will be talking to in a little bit, too, is slapping barclay's with its securities lawsuit. they alleged the bank gave an unfair advantage to its high

frequency trading clients. orders on its trading venue. instead rather of exchanges that might have offered better prices and the worst part about it is they told investors that one group was not getting an advantage over the other group but now it appears that the allegation is that they were. shares of barclay's trading lower oversea owes this news. we're going to check in with our colleague in london for more on all of that in just a few memberships. attorney schneiderman will be our special guest at 7:40 eastern time this morning. meanwhile, general motors telling its north american dealers to stop selling new and used chevy cruise sedans from 2013 and last year. it expects to file another official recall notice for the government. gm this time is worried about

air bags made by takata. and for headlines, a number of economic data points. at 8:30 eastern time, we get weekly jobless claims. then may personal income and spending and then at 11 1:00, the kansas city fed survey. meantime, personal income is forecast to have risen 0.4% last month. >> all right. right now, let's get a check on your thursday markets this morning. futures are flat for stocks. we're not getting an indication either way of which way the market wants to know. maybe a hair tick down, but i'm saying a minor, minor tick down. by the way, the dow is down 1% this month. the russell 2000 down 4%, rather quietly in june. crude oil is down slightly this morning to 106.49. and crude oil, believe it or

not, is actually down a couple of percent so far this week. the ten-year treasury yields, still around 2.5%. that is favorable for mortgage rates. in the currency market, it is about, what, 136.16, euro/dollar. still cost you 11.36 to buy euro. and in the gold markets, gold, like oil, down fractionally:w9àu week, although it is up 5% in the last month. are things looking better or worse going into the economy in the second half? let's get more. with us now on set, eden harris from bank of america merrill lynch and doug duncan, chief economist at fannie mae. thank you very much. ethan, you and i were talking over the coffee machine before the show and i said if you can figure out this economy, you're smarter than i am. you have the terrible

contraction in the first quarter, but home sales, auto sales and rail car shipments are up. how do you score? >> i'd say we just can't figure it out. >> that's not helpful. >> yeah. it's not helpful. if you look at the first quarter, you had an awful december, an awful january, and then things have looked okay since then. if you look at the various monthly indicators, i think you just assume that there's a lot of quirkiness in the way the government calculated statistics. you look at the trends and the numbers that look a lot better going forward. as you said, the housing number very good. but it's not just that. the job market is looking better. industrial production is better. surveys are better. the economy doesn't look remotely like it's in a recession. >> i guess the problem is, ethan, even the good numbers i quoted, car sales, home sales, etcetera, those are back dated. they look last month. is it possible that in the last three to four weeks, things have turned softly that quickly?

no. this is a revision for old data. every time we look at q1 again, there's another create -- out there out of the government. frankly, i've never seen data as bizarre is this. this has a recession number written all over it. they've stopped fighting over budgets in washington. >> for now. >> yeah. but that's going to last a while. there's nothing happening globally. >> hold on. can i just mentions, there is a shock. we've been talking about it, what i thought was supposed to be a shock called iraq. >> yeah, but -- >> for the past three weeks. >> but iraq's oil production has gone up a couple million barrels a day. so even if they go off-line a million, there's still more than they were. >> we talked about how our -- somebody was with us and we had a great decision about when you're supposed to buy crude on anxiety -- you know, macro

anxiety and it clearly -- >> if it was a great conversation, it had nothing to do with me. >> it had nothing to do with you. >> we should worry about iraq if the rebels get into southern oil field. the $10 increase in oil prices so far, that's a dent in the economy. >> i agree with that. >> one town, one small market. we know housing has done well. we hear about the housing wealth effect. is there any quantifiable way to prove, really, how much the increase in home values contribute ultimately to consumer spending, minus people taking out dangerous lines of credit to, you know, buy a boat? >> well, there's various estimates of that.

economists are in pretty strong consensus. each dollar of additional equity generating maybe 3 to 5 cents in sales. one thing to remember is there's the level and there's the trend line. so the trend line in housing is strong. you're seeing the number of people who owe more on their home than it's worth is declining. but there's still 5 million or 6 million households. there's no wealth effect for them because they owe more on the house than they have -- >> we talked to -- goes to your various issue to some degree. >> i thought it was a good piece. >> did you come out on the other side or did you agree with him? >> i agree with him. i thought it was a good piece. i think that what you're seeing in housing today is a slowdown of generated by the run up on

how markets contacted that rates were going to change when the fed stopped its securities purchases. >> so the rates backed off about 40 basis points from the peak. so the most decent data shows the trend in housing is wrong, but when you compared the level, it's pretty flight year over year. >> there's a score of thought that with he ever good number we get, people come out and say no question, it's the fed. the how much is it? how much when the fed stops will things come down if at all, doug? >> i think kevin will argue to

some degree when they stop it's actually better. >> we're taking the other side of that. >> that aligns with our theme this year. we picked as a they've private forces more to the fore. you'll see removal, stimulus from the fed, arm's-length transactions will reveal things. >> i think the important thing to remember is the fed is not going to remove stimulus unless they are very confident in the sustained recovery which hasn't happened yet. we're still talking about this bad first quarter, coming off four years of subpar growth. if they see 3% growth, if they think they're confident it's going to continue, then they take their foot off the gas pedal incredibly slowly. so the fed is still our best friend here, even as they exit. if the fed were fighting a serious inflation problem and trying to slam on the brakes, i would be very worried. but the way they're operating with a focus on growth, the risks are low on this market.

he think the markets -- >> i can it's because of the degree of intervention that we've seen in the post crisis period as sort of unprecedented. >> there's no textbook, right? there's no model, no textbook. >> while the fed may not have been successful in getting a strong growth surge, it is good for the banking system, good for the housing market, good for corporate balance sheets. so they've now set us up for better growth going forward by healing balance sheets. >> okay. ethan, doug, thank you. we're going to get across the pond.it is now time for the global markets report. steve sedgwick is stands can by in london. >> the treasury today on barc y barclay's. we've now got a lawsuit for securities fraud being filed against it by the new york

attorney general. the shares involve the london listing. this goes back to those original accusations we've seen about if broader industry that michael lewis has been talking about in flash point. they need a lot of banks and a lot of strangeness. so chients could see their information. dark pools are soefd upposed to safe from competitors. now they're saying there was so much hfp going on in their exchanges, in their dark pools, as well. there's a lot of that going on, in fact, it goes that barclay's courted the algorithmic traders and the high frequently traders to maximize their interest while charging the hfc guys for almost

nothing. what they did was maximize their own profit and regardless of where the best price was, directed that client business to their own dark pool. barclay's for the most part is saying they are cooperating and looking at these allegations very seriously, as well. we've all been looking at the chicken/egg issue. the dark pools were developed so that chients could get their business if a till tated away from exchangers and now it sounds like hfc guys had their fingers all over it, as well. and the other angle on this is it's a european bank. the europeans are bemoaning the fact that it's the --

>> steve, that's what i want to talk to you about. in london, you know, if you were in paris today and you're talking about bnp, they think there's some kind of grand shakedown going on. that's the phrase they like to use. is that the sithinking there or did they look at the merits of the case that has been brought and say maybe dallas prosh here? >> you're going to get the nationalistic side of things. but the fact of the matter is, i think there's a feeling that the banks generally, i get the american banks, british banks, french banks, if they have been conducting illegalities, i think the opt sit from what the french politicians, if they smilted xhg illegal, why aren't they? anthony jenkins wants to pair down the investment bank.

>> let me ask you a question on this, too, steve. when you look at the situation with barclay's, i know they say they're cooperating, but have they given or said anything that gleans any indication? my biggest question on all this is is this a situation where they're being charged with incompetentence or malice? >> barclay's said we take this allegations very seriously, cooperating with authorities, looking at the matter internetly. one of the action ewe sayings. their existence in the dark pool was taken out of the statistics. >> sounds like it is now. >> it makes it sound like it is. at the moment, it's an alleged, but it doesn't look good, does it? >> the last time they were serious alleges made against barclay's, the last time the ceo had his job handed to him within

a matter of days by the live lend of the federal reserve where you were. their current ceo, anthony jenkins, is he in the line of fire here? >> i don't think so. not at the moment. anthony jenkins has gone on the record with geoff cutmore in davos and he's gone on the record saying, look, i want to make a similar bank based on the retail. bob had a very strong barclay's capital investment banking idea of where he wanted to take barclay's. remember right at the height of the crisis, many lehman assets on this side of the pond. he was trying to grow the investment bank, making it very big and aggressive and some of this is big u.s. names, as well. retail banking kind of guy, he wants to take barclay's simpler. he's announced enormous numbers of job cuts, thousands and thousand he of job cuts.

he's pulling back. this may well actually play into his hand and given further -- we need to pay more thaná0 we will be talking to mr. schneiderman at 7:45 a.m. eastern time. you do not want to miss that. in the meantime, another tech giant releasing information that is workforce demographic and it doesn't look like facebook is eye more diverse than some of its peers. plus, in the next hour, we will be welcoming former fed governor kevin warsh to talk about that great op-ed that he wrote. now, though, time to make the case for what the fed does orr doesn't have pop.

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welcome back to "squawk box." i'm now for the executive edge. facebook releasing its diversity numbers on a similar move by going sxl yahoo!.

facebook says its male/female split is 69% to 31%. announcing strategies quote/unquote to help increase the overall pool of talent from underrepresented communities, 53% of all facebook employees are white. 34% are asian. 4% are hispanic and 2% are black. guys, michelle sandberg leaning in. they're not leaning enough? is that what's happening here? >> you know, the statistics when you read some of those numbers, it's even more when you look at just the engineers who are involved in the in it. it remind heed me a lot of what engineering schools are like on any college campus. it has to be addressed earlier than once you get to the workforce. it's great that they're highlighting this. it's good to see these numbers, but i think are real problems is

that's where you have to try and find out if you can get women interested and continuing these things from high school and beyond. >> yeah. i mean, look at the wording of the statement, basically the underrepresented talent pool. what they're saying is clearly we're just not getting applications necessarily for these jobs. it could be one story if year threating applications but not hiring. but at the same time, they're just not getting the applications. last week when i sat in at the academy, they're encouraging people to sit in and even using cash. another story we've been talking about for the past 24 hours. the supreme court's area ruling in what it means for consumers. the tv streaming service will be forced to shut down or make very big changes. among the broadcasting and cable companies that opposed aeeo on

copyright issues before the supreme court. i know you spoke briefly to barely diller yesterday. >> we e-mailed back and forth. barry diller is one of the key investors in aereo. the ceo of aereo says they're going to keep fighting. but diller, he says it's over. we tried and it's over. this is a huge rowling that will make it difficult for aereo to operate. there's all kinds of questions about what happened to that business now. >> to me, taereo represents something different than i think other people thought. it represents the possibility of unbundling in the future, if this was to move forward, that you might see cable companies be forced to unbundle. now they probably don't. >> whereas talk to the narrowness of the ruling. the justice says even a majority made a point of saying this is not some broad sweeping

commentary on other types of distributive telling. this related to aereo and this was specific business because there were thoughts about what would this mean for other type of transmitters. >> they said this is just about a e aero. >> i can string stuff on my tivo to my device over the internet. but, of course, i have to pay my cable bill. it's a different story. >> back in 1981, the sony case established all the rights to do this, to be able to copy something that you have paid for and view it on your own time. that case is actually the primary care that aereo's lawyers were relying on, sort of a time shifting standpoint. >> the best tweet i saw yesterday, somebody said lots of antennas for sales cheap. >> if your business is making

chee cheese. >> let me tell you about one finaltory. lift, side car and uber x. they're all facing opposition from taxi companies which argue that the upstarts do not face the strict regulations that they do. insurance companies want drivers to carry more expensive insurance policies so you can see the pressure building on all sides, guys. >> this is what we've been talking about for a long time, guys. waiting to see what happens with regulation and the same structures put on taxi drivers and limo drivers, waiting for something to come and happen to these guys. what was so interesting is part of this debate in california is coming because there was an accident on new year's eve in san francisco where an uber x drivers had hit and killed the child. they had turned on the application and hadn't picked up

a chile. >> it kind of underlies the whole model. >> yeah, but you know what? it should be -- >> becky, how about if i give you a ride to the store and there's no money exchanged, i have car insurance. by law, i have to have insurance. >> right. but you're not doing it to make a profit. you're not running it as a business. if you were running it as a business, the expectation is there will be more people in your car. if you take 10,000,#ñsfj>;!wpeq one thing. 20,000 is any. >> i don't know why the insurance regulation is difference. >> you are making money off business, it's a business enterprise and as a result you should be held to a higher standard. if you think of it from an insurance perspective, they're always trying to figure out how big of a risk it is. if you are out and picking up people potentially to make

money, you are on the road more frequently -- >> am i? >> if you were out there doing it as a job. >> i agree with you, no question if you're picking up passengers while the passenger is in the vehicle, you should have an insurance package that is cereal -- >> we all have -- but you could be waiting for a ride and fooling around doing that. you're doing this because of a situation in if you are think as part of the job. corporate liability to ooup uber or the individual? >> to uber or the individual. the individual should have car insurance, but that can be maxed out. >> what uber is saying is we're just an application that is -- >> yeah, but that's the problem. they're trying to supplant to taxies and limousines. >> those are people using their special cars. >> yeah. but they're using their personal cars for business.

that is the point of all of these things. >> if we ride to the store and you give me 20 bucks for cash -- >> it's a different setup. you're not doing it as a business. if you were giving people all dong long and -- >> but thin r then -- >> becky, i happen everyone to -- >> i don't think it's -- >> it's a different door, nigh. >> not necessarily. a time of the black car limo drivers own their own car and they're doing it, too. >> whatever discussion we're having on this, imagine the insurance debate for driverless cars. driverless cars are coming and the insurance industry is completely coming up. >> they're going to clean up because everyone is going to --

because they're so worried about a driverless war that. if you're in the car and something goes wrong, you have to jump up and all of a sudden put the car out of a spin. >> i'm not worried about this over the next couple of years. i think cars will make technological advances. i don't think we have to worry about winning our newspapers while we're driving down the highway. >> that's true. when we come back, we're going to talk more about the squawk sports news. tiger woods is returning from a back injury today. he's set to tee off at congress yalg country club. we have a live report right after this. when you run a business, you can't settle for slow. that's why i always choose the fastest intern. the fastest printer. the fastest lunch. turkey club.

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good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick reporting from the nasdaq this morning. brian sullivan is sitting in this morning for joe. becky at the nasdaq we should say because she's going to be speaking with gopro's ceo, the wearable cameramaker pricing its ipo at $24 a share at the top end of its expected $21 to $24 range. we will talk to the founder, nick woodman, at 8:30 eastern time this morning. the gopro is a must have gadget for weekend warriors, which that's us to squawk sports news.

tiger woods is back in the game playing his first tournament since back surgery back in march. ayman, good morning to you. >> good morning to you. this sa beautiful congressional country club. tiger woods is set to kick off at 8:12 a.m. a lot of anticipation is building. just to get a sense of whether surgery he had, he was aiming to come back for the british open in july. but he said he feels a little bit better. he thinks he's ahead of his schedule for his recovery from that back surgery. so he's out here today. this is the quicken loans national and the significance of this is that its tiger woods' foundation that sponsors the event. he says if it wasn't for that fact, he probably wouldn't be playing today. it's so important for this event

today. tiger woods is vitally important to television ratings. tiger, if he's not playing, the television ratings have been down 25% to 30%. the tigerless masters tournament that happened just a while ago had under 11 million viewers, down 25%. so tyiiger not playing makes a g difference. stub hub hold us the ticket prices for this event increased after tiger's oo announcement on friday. he only announced that he was able to play just a few hours before the official deadline here. so tiger surprising the world by making this comeback here. a lot of anticipation, guys, and we'll be watching him later on this morning when he tees off. >> okay. thank you for that. so in other sports news, some 25 million people did watch sunday's world cup match between the u.s. and portugal and all 25 million were despondent when it was over. record ratings for espn on a

sunday summer afternoon. good luck getting any work done around noon today. that is when the u.s. will battle germany. all right. the good news i guess for street signs 2:00 p.m. eastern is that the game will be over when street signs starts, right? that's a positive for us. dawn, i know you're a soccer fan. i don't know about you, morgan. "the wall street journal" had a fake letter saying why you were stipg work today. >> the reason why, brian, is because this is anticipated to be the most anticipated watched soccer game in american history. in honor of that big u.s. versus germany game we'll put together the duel to end all duels. >> i'm going take the u.s. side. >> and i'm going to take the german side. >> continues the world cup kicked off in 2010, the s&p 500 index is up a whooping 83%. >> but the german dax is up 67%,

so okay, dom, you get this one. >> point usa. >> but i'll take a point for this one. let's go to the economies of the two countries. germany's gdp is up 0.8%. >> all right. that's pretty respectable seeing as how, ouch, the u.s. gdp in the first quarter of 2014 was down about nearly 3%. so i'll concede that point to germany. now, while were talking about growth and wealth, let's talk about billionaires. here in the u.s., 492 billionaires call our country home. that's a big deal. >> in germany, that number is 85 bucks. but if you factor into germany's population, it's about a quarter of the u.s. )å 2quuuuuuutop. >> so let's talk autos. ford pet toug last list. in 2013, the ford focus was number one, chevy cruze and ford

fiesta were on that list. >> but weight, the volkswagen jetta, golf and polo. >> maybe it's a tie. you can't talk about the u.s. and germany without talking about beer. the u.s. beer consumption per capita was 217 bottles. 217. >> but while in germany, that number is 298. so score one point for germany, dom. >> so maybe it's a tie, although i think, andrew, the tiebreaker should be the ford focus was the number one selling auto worldwide. >> hopefully the u.s. plays better than our tie here today. >> thank you, guys. that was very well done and possibly even rehearsed it, it looks like. i've seen that somewhere before. >> brian says he's seen that before. >> i'll tell you this much, guys. great stuff. you have to understand the scenarios here. if the u.s. wins or ties, we're

through. if portugal wins, we're likely to get through. there will away quiz at the end of the "squawk box." >> too many scenarios. how about we just win? just win outright. although we beat the team that tide germany. that maybe bodes well for us. >> thank you, guys. i'm going to have to study for that quiz. coming up, the corporate story of the morning, gopro going public. next, we're going to profile the man behind that company, nick woodman. then he's going to join becky live from the nasdaq, coming up at 8:30 eastern. and if i tap my geico app here i can pay my bill.

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welcome to "squawk box," everybody, or at least some version of "squawk box" today. home builder lenar reported a first quarter profit of 21 cents a share. an 8% increase in new orders and a 12% increase in deliveries. gopro will be going public today. the founder nick woodman will be joining us live at 8:30 eastern time. but first, we talk to josh lipton this morning. our technology reporter. josh, good morning. >> good morning, becky. he's described as a mad billionaire, a thrill seeker who drinks red bull, eats mcdone al's and howls his way down sleep slopes. he's an entrepreneur now running one of the most popular consumer electronics companies on the planet. and it's that combination of

adventure and businessman that some say explains his success. >> nick can turn it off and on when he needs to. he is a consummate salesman, a closer. he spent hours on kwfk doing the very serious work of pitching it. 199, you can have it now. so there is two sides to him. >> what was it like to grow up with nick? i graduated from menlow high school with him back in 1993 the. recently i asked old friends what they remember about nick and what they think explains his success. our classmates shares these old photos of woodman talked about nick's focus and passion in the summer between our junior and senior years, nick convinced chris to routinely get up at 5:00 a.m. to go surfing before heading off to their summer jobs. even back then, chris says, nick was passionate about technology, trying to capture their surf lessons with what was then cheap

waterproof cameras. after college, chris and nick lived together in this house and it was there, at that desk in the lower right-hand corner of the house where chris says nick put together something very special, the first prototype of what would become the gopro camera. guys, back to you. >> thank you very much. how big of a school is menlo park? did you know him well or was this a school of a lot of people? interesting place, nenlo park. >> menlo is a very small school. when i graduated back in 1993, it was only about a hundred people or so. so a very small school and a small class. >> what amazed me is what you said. incredible entrepreneurial spirit. gopro wasn't his first venture. he had a video game company that he started up before that failed. when i spoke with him in the past he said the failure made him stronger and made him better and pushed him to succeed this time around. >> that's true. i spoke to old friends about

nick and i was asking them to recall stories about him, some of the teams that came out were his focus, his passion, his energy, his determination. add to your point, becky, was another theme that came out. this important entrepreneurship and a guy that was never afraid of failing. something didn't go his way, he got right back up and tried again. and i think it's those same qualities, that determination, that spirit of innovation. i think investors are now going cáíáuuuu7orc for ni takes the helmet of a ceo or ni publicly traded company. >> we're looking forward to talking with him. >> becky, before you go, josh, do we have a personal story, though? i want to hear about keg parties and girlfriends, something from high school. was he -- he had to be the most popular kid in class, right? >> you know, i mean, i remember nick as being -- just being someone who had a great big heart, who was very smart. he became very focused on whatever he was doing. and always very excited.

i was talking to another buddy of mine who played football with nick. dan has known nick for a long time and the first thing that came to dan's mind was scoring a touchdown when he was playing football against our big rival valley christian. foriani scored the touchdown, but he looked over and nick was the one celebrating the most in the end zone. that speaks to the passion of the guy, the energy he brings to everything. >> some kind of secrecy oath. anyway, thank you, josh. >> here is what i want to know. oh, we have to go. josh, did you stay up all night or did you get up at 3:30 in the morning? >> it's not -- you know, listen, cnbc producers called tony, hey, you have to be on. a 2:00 a.m. wake-up call, whatever you need. >> you have the becky quick rooster app? >> that's right. >> i forgot about that. >> i was thinking when i come down here, becky does this every day. >> yeah, but it is later here, so we get a bit of a pass on that. josh, thank you.

we'll talk to you later and we'll talk with nick woodman coming up at 8:30 this morning. when we come back, "transformers" is ready to hit the big screen this summer. we will talk to the company's ceo right after this. then in the next hour, he'll be welcoming our guest host, kevin warsh. the rm forefed governor has a message for the central bank. we have a news making morning for you. stay tuned. "squawk box" will be right back. e financial noise financial noise

financial noise financial noise

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welcome back, everybody. it is now officially summertime, and that means it's time to talk movies. "transformers age of extinction" being released tomorrow is the first ever film to use the imax 32 camera. joining us is richard gelfon. thanks for joining us. >> glad i could be here. >> what is the new digital 3d camera? >> it captures images in digital form. it fills the imax screen which is the key thing. you have to step pack for a second. michael bay who made "transformers," one of the most popular films in the world, it shows on 1% of the screens in imax. he made the movie with imax in mind. 60% of the movie will enlarge to fill our screen. a regular screen is like a

letter box. imax is taller and brings you into the movie. it's so much more immersive. >> if he's using your camera to make the film, do you get much less? how does it affect what you're seeing on the other 99% of the screens? >> they print it down. they crop the bigger image into a smaller space in regular theaters, but it's actually 26% more content in the same space seeing it in imax so when you see these transformers fighting or things blowing up -- by the way, i saw it -- >> you must have seen it? >> -- last night for the first time. it's visually spectacular. i think it's by far the best version of "transformers." >> are you watching with the glasses? >> you are watching it in 3d. our camera is next generation.

>> how much of an investment was this for you and what's the pay back? how much does a ticket cost when you go see this in the 3d digit digital? >> breaking it out specifically is difficult. the camera was developed over the years and as part of our deal with pair paramount, we gave them a deal. 60% has the imax in it. consumers when they pay for the tickets, we get such a transforming experience on the screen. >> so to speak. >> that it's really worked out for us well. it's early to say, but the movie started to open internationally this week. in russia we had record results and in australia really strong opening. china's going to be the big game changer for "transformers" because a lot was shot in hong

kong, some in main land china. with the screen growth, the last one did close to $200 million not just ours and people are whispering numbers like 300 million which has been the kind of numbers they've been whispering for the u.s. >> it's great to see you. i haven't seen you in a while. what do you make of all of these theaters trying to compete with you by offering large premium competitors etx. amt does etx. regal does rpx. are they comparable? >> not only are they not comparable andrew, technically, but they're not really competitive. when people go to an imax theater, they go for better cinema. it's an end-to-end solution. we've been, working with paramount for a year, maybe two years. the other theaters take a

regular projector and put it on a bigger screen. >> like you're stretching it? >> yeah, like you're stretching it. i think if they took the feed on this show and put it on a drive in movie outdoors. >> i've seen that. >> when you analyze the numbers, the consumers really aren't fooled. if you look at our indexing per multi-plex and per movie before and after the theaters, they basically haven't had an impact on our business. >> we want to thank you very much for joining us. i do want to see it. thanks for coming in today. >> thank you. >> guys, we'll send it back to you. >> thank you very much. coming up, former fed governor kevin warsh this week co penned an article withstandly druckenmiller. what the central bank needs to do to jump start business. "squawk box" will be right back.

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welcome back to "squawk box." ipo alert. what is the point of view of wall street? becky is getting ready to talk to founder nicholas woodman. today's guest host, former fed governor, kevin warsh. he wants the fed business to get back to business. plus, a mystery ceo answering the squawk call. the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew along with becky.

brian sullivan is here sitting in for joe this morning. we're very happy to have our guest host here this morning, former fed governor, kevin warse. a lot to talk to him about this morning. we have a lot to cover. first, let's take a quick look at the futures and see how the market is setting itself up at the day. the dow looking like it would open off this morning, 21.5 points off. the nasdaq would open down close to 3 points, s&p 500 down. at 8:30 we'll get the labor department's weekly jobless claims report and the may reading of personal income and consumer spending. jobless claims are seen falling slightly while economists are looking for an increase for 3/4

of a percent. 2013 and 2014 model year chevy cruise is he dance. 34,000 have airbags made by japan's takata corporation. is that how you pronounce it? >> takata. >> takata's airbags have already been involved in 10.5 million vehicles recall ld. many made by toyota and honda. they should be able to continue selling cruise models today. go pro is going public today. we've been showing you images for the past 24 hours. its initial public offering was priced at $24 per share. that was at the high end of the range. that values the country at $3 billion. worth $3 billion. go pro founder anything woodman

will join becky at the desk. >> we have another interview right now. aluminum giant delco is coming out with news this morning. they're rapidly expanding into the aerospace and auto industries. it is buying first rickson for2.85 billion in cash and stock. we have the chairman and ceo of alcoa. i think a lot of people think aluminum when they hear alcoa. you have been trying to transform. why don't you tell us why you're doing this. >> exactly, we're creating a light weight material, light weight metals, innovation powerhouse on the one hand. at the same time we're bringing down our commodities and making a very competitive commodities business attached to it. this is a transaction that creates a lot of value for our shareholders as well as our

customers. on top of it it's in a highly growing market so that's fantastic. we're already very strong in jet engines. this gets us additionally strong. it completes our product range and that's what we like. >> i have to say, i didn't even realize you made jet engines -- jet engine components. how big of a business is that for you? you're in aerospace, automotive, heavy truck, trailer, beverage can, industrial gas turbines. those are a lot of businesses. how is that going to break down? >> our l space business is 4 billion today. with this acquisition we are adding 20% to it, 4.8 billion right away. the interesting thing here -- >> you're talking revenue numbers. >> i'm talking revenue numbers. and the profitability, i mean, if you already look at our value add businesses, 50% of revenues and 80% of profits. this gives you an idea what has been happening. we will continue on that. it's building out the value add

business on one hand, continue to growing organically as well as inorganically as well as reducing our cost position in the commodity and it's working. >> is that an admission that being in a commodities business is a no-win proposition. you can't control your future? >> part of it. there's elements where you can't control your future in other ways, too. >> this is true. >> in the commodities business it's a simple game. you have to come down on the cost curve, that's what we ha'r doing. in the value add, it's all about intelligence. cranking up innovations. that's what we're also good at. we have excellent technology. rickson completes our product range in the sweeter spot that exists in the jet engine. the new jet engines have 15% higher fuel efficiency. the way you get there is by increasing the temperature in the burn chamber.

that's a fascinating thing here. the technology that we have does that. now we're adding a technology on rings, they have a growth platform that is very good. we can add and where we really create a lot of value for our customers, the jet engine makers, and then our other customers, the plane makers. >> so you're a supplier to companies like a ge? >> exactly. basically to everybody who makes jet engines, you know? as well as industrial gas turbines. >> which i also didn't realize. >> yes. >> who are you competing with? >> pcp is probably the largest competitor in this phase. >> if your goal is to continue to make changes like this in the portfolio, what's the ultimate end game? what will alcoa look like in, let's say, two to five years? >> well, i think our task is to generate value along the way. it's not how we're going to look in 500 years from now.

>> not 500 years. >> even five years. god knows in today's -- i mean, you going to talk about go pro. that company is probably, i don't know, 9 month old -- >> no, it's almost ten years old. >> ten years from the start of the idea. >> exactly. >> they've had revenue for the last four years. >> to put it in perspective, we've been in business for 125 years. creating value through innovation, we do it on aerospace. we believe in aerospace's growth market. we see the market is growing. this year we under our numbers 8 to 9%. we believe in the next 6 years it will go 7%. that's fantastic. it has a back log of 9 years. fantastic numbers. we do the same thing on automotive. automotive in the u.s. going light weight. the f 150 is coming into the show rooms. we are a major supplier to this. we are driving this change and at the same time we are bringing down the costs on the commodities. >> plus, our guest yesterday is kevin warse, he has a guest.

>> i'm sitting in your chair. i feel compelled to ask klause a question. based on your business, your inventory, your demand, the fed and washington has promised us a skate velocity this year. how does it look from where you sit? >> it looks pretty good, particularly in the u.s., kevin. certainly much better from the years that we have seen in the past. we see the growth. i talked about aerospace. certainly a shining beacon there. automotive also doing very well. we see a turning around coming also on the commercial transportation side which is the business that we also kater to. we brought out the lightest aluminum wheel in the industry they have ever seen made out of aluminum and fantastic product. we also kater to the building and construction business and we see that coming back. the whole discussion about the first quarter, by the way, i believe has been a little bit

overblown. what we believe, it was the absolute brutal cold weather that we have been facing here adding costs on the heating side, making transportation more complicat complicated. the fundamentals are looking good. >> that is really interesting. you think that the gdp number was really a one off? >> i do believe that -- i mean, look, i mean, when you looked at how much of the u.s. was really under snow for such a long time it was probably 2/3 until early -- i mean, late -- late april. late april. and the aftershocks of the transportation rubble that we had we can even see today. >> if it was in april it means the second quarter numbers could be impacted as well. >> some of it. not much. i think the bigger questions from kevin, is there something structural there? i don't think so. what i'm saying i think the u.s.

is a very good place, very good place, and it's a good place to invest. we have announced in the last i would say three months we've announced quite a number of expansions here in the u.s. a lot in the automotive and aerospace sector. >> manufacturing? >> manufacturing. >> because of the advantages you have with energy here? because of why? >> no. certainly shale gas helps and low energy costs are fantastic for us and have lots of advantages, but it's more around the innovation capabilities and the proximity to the customer. i mean, the u.s. market on the -- in aerospace, i mean, this is a large market where u.s. has a dominant position in there. u.s. and europe are also there. that's why firth rixon is playing. that's where the biggest areas are. at the same time you see automotive, the automotive

companies are responding and they're discovering innovation. you get fuel efficiency. consumers like it. your pocketbook is saved. fuel efficiency is one of the top decisions for every car buyer depending if they go for a large pickup truck or a smaller car, which is very, very different from what it was before. >> klaus, you want to thank you for joining us. congratulations on the deal and we look forward to talking to you soon. >> brian, i'll send it over to you. >> great interview there. in the meantime, the guy you just heard of he asked a question of his, quote, old friend. we'll get to the bottom of that. former fed governor kevin warsh. the corporate story of the morning. go pro pricing its ipo at the high end of the range. nick woodman will join becky live at the nasdaq. we have cool go pro shots all morning from the "squawk box" set. we're back after this.

welcome back to "squawk box." 7:14 in the east. the s&p and dow indicating maybe a slight drop at the open. a little change there. it's been lightly volatile. the last couple of days have seen action. making headlines, london stock exchange is buying the company which owns and runs the u.s.

russell indexes for $2.7 billion. i said, guys, it was a big day. as you might have heard. there's a soccer match going on later on. >> i heard about that. >> will farrell stopped by the fan hq where the game will take place. all the stars are out. >> is go pro going to attach go pro cameras. that would be a good promotion. >> good question. two points. maybe they should to the refs so we can see what the referee sees. >> that's good. >> and also any italian player's shoulder. >> that would hurt when you bite it. >> our guest host for the next two hours, former fed governor kevin warse. he co-authored that article we're talking about. the economy is being held back because of the fed policy. i don't mean to speak for you. i want to read two sentences

from this. you say the fed's extraordinary tools are far more potent in goosing balance sheet wealth than spurring real income growth. you say all of what's been going on provides little solace for families and small businesses that must rely on their income statements to pay bills. half of american households do not own any stocks and more than 1/3 don't own a residence. given that, here's the question. is it -- where would we be if the fed was not goosing things? where would we be in terms of housing? steve weissman comes on and makes the opposite argument. >> it's great to be here. it's great to be in becky's chair. thanks for the first softball question. >> this was easy. underhand. >> if you go back to two different periods of time. one period of time is the depths of the financial crisis. what you covered at length when

i was there. these sorts of extraordinary actions were essential and necessary. they were risky, but there was real reward. how to get the stock market to open on monday. how to get asset prices to elevate up. that was 5 1/2 years ago. we're 5 1/2 into a recovery that is a mediocre recovery. i think the best way to judge the success of this program is to look at the way we judge economic policy generally. is it efficient and is it working, point one? two, is it fair? on the efficiency point, the federal reserve five years in this recovery is using policies that are almost as extraordinary as in the depth of this crisis. we are stuck with an economy that's growing at 2%. on the fairness point, if you have access to credit, if you've got a big balance sheet, the fed has made you richer. so i would say this has been in some sense reverse robin hood. this is a way to make the well to do more well to do because

that's what the federal reserve can do. to your question about what would happen if rates were very high right now. no one is suggesting that. no one is suggesting we should flip a switch and have long-term interest rates at 6%. what we are suggesting, however, is we need to get a normal looking interest rate curve. we need to get interest rates back to normal. how does that work? if that happens, we think that we'd see an increase in capital going to the right assets just the way that klaus talked about investing in property, plant and equipment. we need the business investment which will then be matched by labor. we believe then the economy can grow at 3% instead of 2%. if that happens, that is great news for all parts of this economy. >> well, i know steve weissman respects you very much, however, he called you wrong recently. in an on ed of his own on cnbc.com responding to you he said, what you're missing is that, yes, direct capital

expenditures may be an issue, however, the ipos, this kind of goes to go pros and what we're talking about, the ipo market has heated up so much because of asset prices going up that ipos may be the single greatest form of capital expenditure and formation and, therefore, ipso facto, you are wrong. >> i love steve. he's a great guy. we should bring him on. so i'd say, first, this class of ipos is the least profitable class of ipos since, oh, i don't know, 1999. so let's look at this group of financial firms that are going public. go pro might well be the exception and they have years and years of losses, historic and forecast. maybe he's right. maybe this turns out to be a great class of ipos, but i would not judge the state of the economy by the willingness of retail investors, institutional

investors to buy a hot stock. i would judge the fundamentals -- >> i don't think he's gauging the economy, i think he's saying ultimately this capital you have formed for the ipo will go towards hiring a worker. >> so, two facts. one beautifully said this morning in the wall street journal by ed prescott says in spite of the headlines, in spite of hot ipos, the number of startups that have grown is very, very low. we have 20 or 30% fewer new companies being created. so you move away from silicon valley and silicon alley, you go to the heart of the country and you are not seeing the same animal spirits, you are not seeing the same entrepreneurship. i wouldn't let hot ipos fool you. secondly, i would pay much more attention to investment in the real economy than i would to investment in financial markets. the federal reserve is in some sense watching the back of the world's investors here.

the bernanke put or yellen put makes the world's investors feel like stock prices can only go up so they're participating in this market. where i'd rather they be participating is investing in the real economy. >> your sense, if they did flip the switch, not immediately but though took their foot off the peddle much quicker than they seem to be, the immediate or at least short-term dislocation looks wliek? >> so they've been focused, and i would say too many people have been focused on short-term dislocations since the depths of the crisis. >> i'm not saying we should be focused on it but i'm wondering if there is a quarter or two that looks so politically unpalatable -- >> where we had a negative 2.9% growth, a quarter or two where we've been running at 2% growth. or like the last five years,

productivity is running 1% below. this myopia, the focus on how's the market going to look on monday, how is the next gdp going to look, how do we look at the next election? this has been guiding policy for the last five or six years. i want you to be focused on the long term. >> do you think there's pressure on yellen and perhaps even bernanke before from the president, from the white house in some capacity one way or the other? >> no. >> no. when i say politically unpalatable, it's not that, but it is a larger sort of pull that sort of takes place psychologically? >> i say two things. janet yellen has a tough job. she is incredibly talented. i've worked with her for many years. she is very capable. there's a huge challenge in front of her. she's inherited a very difficult set of circumstances. i think she's very talented and will do her best to navigate this. this is not about politics. i've got an enormous respecked

for the federal reserve. i spent 5 1/2 years there. they are in some sense in my judgment stuck. they find themselves with zero rates which they are trying to persuade investors that it's been around. now they have the problem of what happens? does this balance sheet recovery in some sense move against them? they need to have broader -- a broader, more fundamental economy with broader policies to help her. >> we're going to continue this with kevin for the next two hours. a call on facebook, google, twitter, and netflix. you'll want to hear the call on netflix because the price target if you own the stock is concerning. later on, he's written the book on everything from facebook to legalized gambling. ben mezrich sounds off on disrupters, amazon, aereo.

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>> announcer: now the answer to today's aflac trivia question. how many world cup finals have been determined by penalty shootouts? the answer, two. in 1994 and 2006. and let's hope we don't have another one. all right. coming up, why one analyst is less than enthusiastic about netflix. senator rob portman. he's got a plan to cut the tax to 25%. he says also create jobs in the process. then, his company sells what is now a must-have gadget for all --

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welcome back to "squawk box", everybody. shares of bed, bath and beyond are down this morning. falling short of estimates. barclays trading has been lower as well this morning. it's down by about 4.8%. new york attorney general eric snyderman is slapping the bank with a lawsuit. they say they gave an edge to high frequency trading clients even as it promised to protect other traders from dark pools. attorney general schneiderman will be our guest.

we'll talk to him. >> barclays analyst initiating covers on big internet stocks that you know, facebook, google, twitter, amazon, yahoo and netflix. among the headlines here, an under weight rating on netflix. the stock is at $441.40. so actually the barclays analyst, paul vogel, i don't know, that's why the coverage is so initiated on all of these at one time sees a 5% drop in shares of netflix. in the meantime you have google, facebook, twitter as over weights with a gain of 12 and 16% respectively on some of those names. up side for twitter, facebook, google. 5% down side for netflix. i'm noticing this now, kevin. fed policy is, quote, reverse robin hood. ben eisen at cbsmarketwatch.com coming out and making an article. you're making an imprint. >> that's because of go pro.

they've been following me all morning. >> we have. >> is it on? >> i don't know. there it is. it is on. are you going to be the cameraman? reforming the nation's corporate tax code has been a topic of contention on capitol hill for years. our next guest has penned an op ed on three ways he would like to change the tax code. senator rob portman joins us. good morning, senator. >> good morning, andrew. how are you? >> great. it was a fascinating piece. before we get into the details, let me ask a sort of broader question. is it possible in the context of what's going on in washington to actually suggest that what you put in this piece could be made into law in the next 24 months? >> absolutely. it's urgent. we see companies leaving our shores and companies are getting

acquired. they're less competitive because of our tax code. second, the president has said he's for doing this so this is one where republicans want to do it, the president wants to do it. we have slightly different ideas how to do it. little presidential leadership and republicans holding firm, i think it can be done. >> one of the things you're seeing, i'm surprised it has not put pressure on the change of the tax code, the corporate inversions. we're seeing a lot of companies consider moving out of the country. walgreens which is trying to merge with boots and what's going on there? >> you got in my head. >> i'm in your head? >> yeah. >> i'm hearing about it because i'm focused on it. i don't hear a lot about it in washington. >> it's amazing we aren't hearing more in d.c. people are paying attention because their constituents are hearing about it. a lot of people go to walgreen.

medtronics decided to invert. we have companies in pretty much every state that have done it or are looking at it. i'm told if we don't move quickly a lot of other companies are going to do the same thing. this makes a large difference to people. companies are becoming foreign companies. it's about communities like st. louis losing anheuser-busch and my hometown in cleveland losing a major business. it's not just the reduced number of jobs, the pay, the benefits, but it's also american companies tend to get real engaged in charitable work and helping our communities be a better place to live and work. i think this is a big deal. we better get on top of it quickly otherwise we're going to wonder what happened. >> senator, carl levin is suggesting washington is so paralyzed and he's suggesting we won't get real reform over the next two years. in fact, has now proposed to try to prevent companies from

performing the corporate inversions in the meantime. what do you make of that? >> it just won't work. it makes it even less competitive if you're an american company. so, i mean, i think that makes no sense because it's going to drive more companies off to work. how would that keep anheuser-busch from being purchased by a brazilian/belgian company? it makes our companies less competitive. right now the after tax profit of a foreign company is going to be better than ours. i had a company saying they're starting to do international work. they want to buy a company in korea. they're done with their negotiation. a german companies comes in and says, we'll pay 18% more whatever you negotiated. that's the reality. u.s. companies are constrained. you can't grow with this corporate tax. we're in danger of being targets for acquisition as we've seen. a lot of companies, again, are going to go with their feet and go overseas. you can't stop companies from doing that with the tax code. >> senator, let me ask it a little bit differently.

got the u.s./germany soccer match today. we feel good about the u.s., feeling patriotic. is tax inversion inherently unpatriotic? is it legal? >> it's unpatriotic for washington, d.c., not to give companies the ability to compete and win and not give workers the ability to compete and win. that's what's happening. what's unpatriotic is the fact that washington is ignoring this problem. if we continue to do this along with the over regulation, along with health care costs way too high, along with energy strategy that is not conducive to competitiveness, we're going to see an erosion of our economy. look at what happened last quarter. we're look being at 2.9% reduction of gdp going back to the recession. we better wake up in d.c. and start to do things to make american competitors more competitive globally. >> senator, you deserve a lot of

credit. this will do a lot to bolster the economy. is it the right thing to go after ceos who are rational, who see this mess of a tax code or is it the right thing to do to push for fundamental tax reform so that the incentives are that they grow and create jobs in the u.s.? >> look, the right thing to do is to reform the tax code so that it works for american workers. and i know a lot of my colleagues love to go after the companies. we've dragged caterpillar up here, we've dragged apple up here. by the way, apple is the biggest taxpayer in the world i'm told. i went to those hearings. i was able to talk about their competitors globally all of whom have lower taxes than they do. in legal ways they're trying to avoid the tax burden. they still at the end of the day are paying higher taxes. what we've got to do is realize this is a huge problem for america's competitiveness and for the growth of our economy and do something about it. the up side is it's pretty easy

to do something about it. we have an international system that dates back to the 1960s. every one of our major competitors have reformed their tax code substantially since the 1980s when we lowered our corporate rate. so we've got a great opportunity here to do the right thing and to give the economy a shot in the arm. >> okay. senator portman, we'll leave the conversation there. we hope to continue with that conversation with you at some point later. >> thanks, andrew. >> talk about not just what it gets cut to and loopholes and everybody on both sides who has an income screaming and hollering about that. coming up, we have much more from kevin warsh, and new york state attorney general eric schneiderman. he'll be joining becky at the nasdaq. he filed a suit against barclays yesterday over the company's dark pools. right now you're looking at brian sullivan's go pro handiwork. this is him driving -- spinning out. >> spinning out. >> up next, we're going to show you the most expensive go pro

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welcome back to "squawk box", everybody. we are live from the nasdaq. the site this morning where we'll be talking a lot about go pro today. it's their ipo today. we do have anything woodman who is the founder and ceo of the country who will be joining us at 8:30 eastern time. in the meantime, we are looking at what we call the most expensive go pro video ever. this is a montage of the footage that was captured on a go pro camera. if you thought it looked cool before, check it out. you're seeing it from this point of view camera. let's get back to our guest host today, former fed governor, kevin warsh. kevin, great having you here today. pleasure talking to you. i want to spend a little more time trying to figure out what you think is happening in the economy today. those first quarter gdp numbers were really horrific. we knew they were going to be bad numbers but i think it stubbed evestu

stunned everyone to see it. klaus thought it was a one off. do you? >> surely the economy is performing considerably better than the first quarter gdp statistics, becky. so to the extent that the first quarter data would say we're heading to a recession, it sure doesn't appear so by a broader bit of data. however, each year starting in 2009 the promise was that next year would be 3% growth and the economy would be at a skate velocity and each year there's been a series of excuses, a series of rationalizations. the rationalization was who knew it would be winter, who knew it would be a cold winter. so i don't mean to be too glib or too dismissive but the underlying run rate has changed very little over the course of the last 5 1/2 years. we're growing a little bit more than 2% as we speak. if you arrived here from mars, becky, and you wanted to evaluate the state of the economy you'd say this has been

a 2% grower and you wouldn't believe the executions over the last five years. you'd say with the mix of policies the economy can grow around 2%. it allows risk assets to continue to rally but is terrible news for those trying to be in the labor markets. it's bad news for those that don't have balance sheets. >> that sounds like a serious structural problem that we are not going to get away from any time soon if you're talking about the labor market from that perspective. >> yeah, i'm not in the secular stagnation camp. my view is this mix of public policies with no tax reform, no regulatory reform, no fiscal reform, free trade agenda that seems to be dormant, when you see all those policies that are really on the sidelines and you see a central bank that's trying to compensate for the failings of these other policies, i would say that mix of policies produces an economy that can only grow in the low to mid 2%. i don't think we're stuck with that. where i disagree with the new normal crowd and the secular stagnation crowd is if the

policies could get better. if rob portman's tax reform package were to become law, this ee con be my can jump out to the up side. when it does, you'll see big business investment and you'll see labor that will re-enter the labor force. i just don't think that fed centric policies can do much to take a 2% economy today and turn it into a 3% economy. >> well, let's write off washington for the moment because by just about all accounts it seems like nothing is going to get done, at least not before the next elections in november. if you're looking at that from a trading perspective, you work with stan druckenmiller, if you look at this from a trading economy, what should you do? what should you be investing in? >> that's a great question, becky. a 2% economy that allows interest rates to stay very low, that allows inflation to stay very low could continue to be good news for risk assets.

this is a world where risk assets can continue to do okay but it's hard for me to know when this game ends. it's hard for us to call this turn perfectly so the best advice, which i've heard stan give that i would echo, is you have to be liquid in a market like this because when things turn, they can turn in a real hurry. i think the big risk that investors need to look out for that stan and i mentioned in our op ed is if the economy changes from its current trajectory. so if the economy starts growing at 3%, which i think is possible. i'm open minded to that prospect -- >> not on an annual basis but based on quarter by quarter basis because that first quarter was so bad there's no way you're hitting 3% this year. >> the markets could see a second quarter gdp in the 3s. could believe that the economy is at a skate velocity. i might take the other side on the real side. if it's perceived to be growing at a higher level.

no matter what the fed talks about in forward guide dance, my judgment is interest rates will move to the up side. >> that could hurt stocks in turn? >> absolutely. i hear yaefr one coming on shows like yours, becky, saying the real economy will improve and that will grow into the stock prices. if the real economy proves, it strikes me interest rates could move and would move in a hurry. if i were a retail investor, i'd be rooting for 3% growth. if i were trying to find a job, that would be essential. i'd be rooting for it. this is where we see the two economies at work. >> let me play really quickly the other side of that. we'll move on in just a moment. if that's the case, if you think the market is wrong in its perceptions, stock market tanks as a result, you would then buy and see that as a buying opportunity because you don't think the fed's getting out anytime soon? >> yeah, so two things. first, i've got a lot of humility about all of this. i recommend that my colleagues in washington and around the world have a lot of humility. none of us really understand how the economy works.

none of us understand exactly how free money is finding its way from the economy so if i were an investor or if i were a policy maker in washington i'd be humble on all judgments, but what i'm saying is that in some sense my judgment is this economy is not showing any evidence yet that it is growing to a skate velocity. >> okay. >> what i look to is capital investment and global trade. neither is growing as good as the hot share buy back market and so i'd like to see those real economic indicators as a real sign as the trajectory of the economy. >> kevin, thank you. kevin warsh is our guest host. he'll be with us the rest of the morning. when we come back, new york state attorney general eric schneiderman is accusing barclays of dark pools. "squawk box" will be right back.

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everybody. joining us right now is the new york state attorney general himself, eric schneiderman. thank you very much for being here. >> glad to be here. >> unless you're well versed in the market, you may not understand what dark pools is. you started looking at the pools -- the pools that don't disclose what's going on inside them for the trades. what made you start looking at these pools to begin with. >> well, we started looking at

them and our whole investigation of this area, relationship of high frequency trading and dark pools started a little over a year ago. dark pools theoretically are places where large investors will go to protect themselves from high frequency traders because there's less disclosure if you want to buy 10 million shares of facebook. this is supposedly a way to tell you what's doing. >> ordinary investors, what are you looking at? that's not necessarily an average person on the street. >> no, but a lot of these are big funds and they are trading for average people. they're trading for pension funds. very few people, small investors are going into the market themselves these days. usually they go through one of these firms. we are talking about people's pension money. the average citizen is trading

through a large institutional investor. we found specifically that there was fraud committed against large institutional investors. >> some of that was marketing materials where you've said they were telling you one thing and then the opposite was taking place in reality. >> correct. in one case there was a large investor that wanted to know what portion of barclays trades were being routed to the exchanges where they'd get the best price and what portion were going to barclays dark pool whether it was the best price or not. we have documentary evidence and testimony that the number was 75% of trades going to barclays dark pool. one of the people preparing it was ordered to change it to 35% to make it look like they were sending the trades to the best trading venue. that person refused to change the number and was fired. they presented the false information to the investor trading the number 75% to 35%. >> that to me sounds like it is not something that is being done accidentally. it is not something that is inadvertent.

that sounds like maliciousness. is that your allegation, that this was maliciously done and this was absolutely with intent? >> this was fraud. this was fraud and not the only example. the other major area of deception was they had this very elaborate presentation to investors how safe their dark pool was, how they screened and rated all investors from what they call toxic predatory aggressive traders, meaning high frequency traders. in fact, the whole system was a sham. they had a tauted liquidity profiling service that was supposed to protect people and throw bad actors out of the dark pool and they never removed one. one barclays investor were called a sham. >> they were filled with shark when they were advertising they were shark free pools. >> they were diving into waters full of predators and we allege that barclays in fact invited the predators in. they gave informational advantages. they charged them less per trade. >> why would they do that?

why would they charge them less? you would think if they were getting special access like this they would be charging them more? >> they wanted to increase the trading values in their pool. as a matter of prestige, they wanted to be one of the largest in the united states. we have all the documents that that's what they were referring to. they called it the franchise. in order to do that they wanted increased trading by high frequency traders because that's one way to run up the volume. >> barclays did release a statement saying we take these allegations very seriously. barclays has been cooperating with the new york attorney general and the sec and has been examining this matter internally. the integ gritd at this of the markets is the top priority of barclays. >> any comment? >> we're always happy to have cooperation. >> you've been taking a long, hard look at these dark pools. >> i don't want to comment on any other investigations, but the conduct here was so egregious and so clearly ongoing that we felt we had to move on

this. we have documents going back months referring actually to my comments and comments by people like you in the press calling attention to the problem of hfts and dark pools. instead of changing their conduct giving a whole new set of misleading talking points to their salespeople to go out and cover this up. >> really? >> yeah. we're both in there. >> it sounds like we're going to hear a lot more about this. attorney general schneiderman, thank you. >> thank you. andrew, we'll send it back to you. we have a huge hour coming up. ben mezrich has written a book about facebook and moon rocks. we'll talk about amazon's battle with publishers. go pro founder and ceo, nicholas woodman will be joining becky at the nasdaq ahead of the company's ipo. back in a minute. at optionsxpress our clients really appreciate our powerful,

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in a world where capturing video is just a cell phone kick away. before go pro starts trading

we'll talk to the company's billionaire founder. hold on tight. the third hour of "squawk box" starts right now. ♪ ♪ ♪ video killed the radio star ♪ pictures came and broke your heart ♪ welcome back to "squawk box." i'll andrew sorkin along with becky quick at the nasdaq. we'll be joining her at the bottom of the hour by go pro founder and ceo, nicholas woodman. our guest host this morning, so far for all two hours, kevin warsh, former fed governor and visiting fellow at stanford's business school. we'll have more from kevin in a few minutes. he's giving us his views, some controversial, some not so controversi controversial. at 8:15, we'll talk to ben mezrich. he's the author of "the

accidental billionaires." before we do all of that, brian sullivan has this morning's top headlines. >> thank you very much, andrew. your top corporate story this morning is go pro. the wearable camera maker pricing its ipo at 24 bucks a share. that was at the top end of its expected 20 buck to 24 buck range. it will value the company at nearly $3 billion. go pro was the first consumer electronics company since the 2011 ipo of skull candy. it's going to start trading under gpro. nick woodman, billionaire, surfer, under 40, billionaire. he'll join becky at the nasdaq. woodman and his company are the biggest shareholders with a 49% stake. that does leave a little -- not 51. >> envy and jealousy never got

anyone anywhere. >> admiration. admiration. not a bad life woodman has. he created a heck of a company. >> he did. let's talk about the other headlines. alcoa buying firth rixon. ceo klaus kleinman told us that it accelerates them into a major supplier into the aerospace and auto industries. mary bar is sitting down with us. she says they've addressed the faulty ignition switches and says gm has fired everyone they were going to fire. barra adds more recalls are possible. >> we're going to continue to look at the data that we get and we're going to take the action that we need. that's our commitment to customers. if we find an issue, we're going to deal with it. >> so it's possible we could be hearing more recalls down the road? >> it's possible. barclays facing securities fraud. a lawsuit from new york attorney general eric schneiderman. he alleges that the bank gave an unfair edge to its high frequency trading clients even

as it promised to protect other customers from the trades. we just had that interview with mr. sniderman. we talked about the politics of prosecutions and there's a fascinating article if you have an opportunity this morning to check out politico. they have a piece that looks at the politics of eric holder, actually, and they have an anecdote in here with david bluff and mr. axlerod where they actually say that pluff told a campaign aide, we need fewer speeches and guys in suits being marched out in handcuffs. the good news on the other hand, eric holder an aide equipping -- there's a curse i won't use that part. we don't make charging decision based on polling. nonetheless, of course, one of the big issues about eric holder has been that people in the white house have been pushing for more and don't believe that

he's doing enough. one of the questions the piece raises is why is eric holder still in his position given the politics. >> there was a piece last night that i was reading on that. it was why the heck is eric holder still there. >> yes. >> was that also politico? >> i believe it may be the same piece. referring to the same place. >> i'm reading something through zyte, the app. i can never remember unfortunately where it comes from. that's probably not a good thing. >> as it goes, the attorney general generally serves at the pleasure of the president so that's why he's still there. >> but, therefore, the president must be on board with whatever strategy is going on and must be okay with the perception that he is -- or people like pluff and axlerod are worried. >> that's a pretty big revelation. if that reporting is accurate, pluff is telling somebody, go arrest somebody. get somebody in handcuffs, anybody. we are watching the futures at this hour on a thursday morning. 8:04 in the east. good morning. the markets finished positive for the first time in three sessions.

trying to avoid our first three-day losing streak in a long, long time. problem does, of course, remain volume. where are all the buyers and joining us is j.j.kineham, strategist at ameritrade. where are all the buyers and sellers? >> well, i think you have a combination of two things going on right now. you know, how many times do you have somebody on your show talking about, well, if the market goes down 3%, 5%, that's where we're going to get at. we think it's over bought here so we're waiting for the selloff. of course, we've heard that same sort of logic since the s&p 500 was trading at 1500 or 1600 for some. the other thing is this. i don't think people have been squeezed yet. this is the market rally that nobody respects. >> that's right. >> you don't see many people who are long, who are cheering, so to speak. they're very nervous. the slightest bit of bad news and they're out. >> the bad news or kevin's bad news when the market or worried about the short-term bad news of the fed pulling back. >> look at yesterday morning

where, you know, again, the gdp number, i heard you talking to kevin earlier about this, that it might not have been quite as accurate. if i look at that number yesterday, the week before ms. yellen and her speech had set us up for the fed that that was going to be bad news. it comes out and the path of least resistance is to drift higher. there's so much money down below waiting to buy in. really in my opinion until the s&p 500 gets to 2000, you're not going to see the shorts truly get squeezed. >> i'll give you a number. we had this on "street signs." the number of s&p 500 stocks that were up more than 10% this quarter, more than 1/5 of the s&p 500 is up more than 10%. this has been the most unloved, hold your nose stock rally of all time and a great anecdote. i spoke to a friend of mine that's infinitely wealthier than i am.

he bought a car and he borrowed the money. he could easily have paid cash for the car. i said, why would you take out a loan, dude? i mean, you can buy ten of these cars cash. he said, why wouldn't i? my car loan rate was 2.5%. at&t's paying me -- he didn't mention at&t, i'm making that up, but he named another stock, is paying me twice that, why not just buy stocks. >> and you can see, the latest leg of the rally was actually so much let up by these stocks that do pay the 3.5, 4.5% dividend. 10 year rate of 2.5%. let's look back six months. was anybody saying that rates would be lower at this point? the whole world i think was generally accepted that if we looked at the beginning of the year having this conversation today, we would be talking a ten year rate of 3.5 to zblsh there have been some. scott of guggenheim. >> there are very few people. i think the market has taken

many people by surprise. number one, rates would be higher. number two, the market would have a correction because we had such a phenomenal year last year. and i think one of the reasons the market is so unloved is it's taking everybody by surprise. >> what could possibly go wrong? >> exactly. >> if that gets pulled, what happens? >> well, i really think we talk about the fed put in terms of direction. i think the fed put has been in volatility in terms of every single product. there isn't a product out there you can say is very volatile right now. as we go up you would expect volatility to go down. i think the way the fed is doing it is smart. they're taking it out slowly, slowly, slowly. we can continue. let's face it, you look at corporate profits. we can continue it at 2% gdp and still do okay. we're not setting the world on fire. >> you disagree with this gentleman over here? >> yeah, i do. i don't 100% disagree in the fact that i think we can continue to go for at least, you know, 12, 18 months at this 2% growth rate.

it won't be exciting. >> you're thinking about the market and he's thinking about the economy just to make the distinction? >> yes. i would say i'm thinking more about the market than the economy. i will say the problem for the economy is not that we're not creating jobs. i think the real pressure on the economy is going to be the quality of jobs we're creating. for a long time it was like, let's create jobs. for the next year it will be where are the jobs being created. the last report wasn't that bad only because if you look at the restaurant and service sector, it was the third area of jobs being created. >> yeah. >> normally at this time of year it's number one because it's very cyclical so i think that in that sense it was not a bad jobs report. that's what we have to keep in mind going forward. >> the real economy in the financial markets ultimately have to match. >> i agree with you there. >> that is the history of post war u.s. economics and finance. the federal reserve has separated these two things. as andrew has written about it

extensively, that's their job in the crisis. but the front page is telling us a world that is very scary. the business pages are telling us more ipoed and great news. i will tell you the front pages and the business pages will ultimately tell the same story. the only section in the newspaper that can tell a different story is the sports pages but somehow they're all telling different pages. >> can you explain -- can i ask you one thing, kevin, though? like i said, i'm saying i think we can continue this way for 12 more months. i'm not saying there -- >> and then you think it ends badly? >> well, the longer we continue to go up without a 3 to 5% correction the worse it ends. >> right. can you explain briefly what is going -- we just talked about ipos. i watch that and look at the indicator in the board room. oftentimes a lagging indicator because people are always trying to get their houses in order and buy things at the worst possible moment. where are we in that? >> normally we see mna pipe lines grow coincidence with

business cap x. a ceo like klaus that was on would make a decision, should i build it or should i buy it. it should be no surprise that mna pipe lines are going in one very high direction and business cap x is very depressed. why is that? because businesses are being rewarded for acquisitions, they're being rewarded for financial engineering and very little of that is about job creation. so for that other half that may or may not be watching the show that don't have these balance sheet recoveries, they are waiting for that business capital investment. we should see business capital investment pick up but we're seeing very little evidence of that to this point. >> i worry that history is not going to be the guide here, kevin. i'm sure everybody around this table has read a lot of financial history. i love history and i think we make the same mistakes over and over again. probably the best guide book for human behavior. in this time now i worry because the models that economists use are based on what has happened. we've never had this kind of integrated seamless just in time

global economy. there's a part of me that does worry that maybe all of history will be irrelevant when modeling. the jobs, you talked about quality -- you were spot on. the average manufacturing wage used to be about 20 bucks an hour. if you're laid off for x amount of time studies show you tend to end up in a services job. you used to work in a manufacturing facility in warren, ohio. lose your job you might go work as a night manager at the comfort inn making $12. you tend to lose incomes as that quality of job goes down. i wonder and i worry and i hope i'm wrong that those jobs won't come back. that's the fear. >> the only thing i wonder about is there are going to be some tax code change of some way to -- you guys talk about it all the time. repay the t repat ty theria -- repay the tr eight some money. >> we'll leave it there. kevin sticking around. j.j., thank you. coming up here, he tackled

card counting in vegas and football billionaires. i've read every one of his books. ben mezrich is going after the kids. he's going to weigh in on the supreme court's decision and amazon's fight with publishers coming up. our interview of the morning, go pro founder and ceo nick woodman will join becky at the nasdaq. that's coming up at 8:45. i do have billionaire envy. he knows what that refers to. we're back after this. ♪

♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] ♪ my mom makes hospitals you can hold in your hand. ♪ my mom can print amazing things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] ♪ my mom works at ge. ♪

>> announcer: today go pro ipo. the first trades, market reaction, the future of the

welcome back to "squawk box." 20 years ago nobody heard of amazon.com. david favor reports in a new cnbc documentary. amazon's aggressive tactics have led to a major battle with a publishing giant. >> reporter: it's no longer just the talk of the industry. the battle has spilled onto the front pages. >> well, i'll tell you what, amazon, i have got a little package for you right here. >> reporter: when amazon made it harder to buy books from hashit, one of its authors stephen colbert made it harder.

>> wait a second. here it is. watch out, bezos, this means war. >> amazon is bombing the cities. they're attacking and the publishers are sitting back there and going, look, what can we do? >> james patterson is among the best selling writers of all time. >> i have an idea pile here somewhere. >> reporter: and one of hashet's biggest guns. >> i think books are important. stephen king things books are important. j.k. rowling thinks books are important which is why all of those people are speaking up going, hey, amazon, please. this is not the toilet paper industry. these are books. >> are your sales going to be hurt as a result of this dispute? >> sure. they are being hurt right now. of course. >> for more on amazon's fight with hashet and how it's playing out, tune in to "amazon rising." joining us with more on amazon as well as other social media and social disrupter, ben

mezrich. bringing down the mouse. not the house. it's a children's version of bringing down the house. good morning to you, ben? >> good morning to you. how are you? >> this is a simon and shuster book i have in my hand. i want to talk about it in a minute. along the lines of amazon, hashet, more importantly the larger issues of amazon's control over the business, you think what? >> well, it's like my parents are fighting, you know? i mean, it's scary. the publishers need amazon because amazon reaches the consumers. that's where everybody is buying their books. amazon needs the publishers to make sure the books are any good, right? i think that they have to figure out a way to work it out. you know, overall i agree with what patterson is saying is that books are important. books are incredible. we want everyone to read books. we want our kids to repeated read books. i think amazon wants people to read books, too. they're in the market of selling them. so there has to be a way to work

it out without firing weapons at each other. >> right. >> everyone needs amazon. half of our books are sold there. >> should we put books in a different category than toilet paper or other household products? one of the things that amazon has said repeatedly throughout this back and forth is that it's just really a negotiation. we have negotiations all the time. they wrap themselves in the flag of the customer. they say we want to be able to provide a cheaper product -- we want to be able to provide a product that's cheaper for the customer. that means we have to squeeze our suppliers. >> right. i mean, listen. books are different. you know, books are -- they're aimed at making people smarter in a way. they're important things in our society. you want kids to be reading. it's not the same as selling toilet paper. on the other hand, it is part of the entertainment industry to me. it is something you are selling. it is a product. there has to be a middle ground. writers have been around for a

long time. my hope is there are writers around 50 years from now. the way i'm going, will being an author be a profession in 50 years? i think that has to be kept in mind. we want people to buy books and we want them to think of them as special. >> ben, i'm going to ask you a question that's going to put you on spot with one of your parents in this case if amazon is one of them. do you believe that regulators should look at this company? >> well, you know what, i hate things going in that direction. i want things to work out. i'm an optomist. the people i've met at amazon have been very nice and the people in publishing want amazon to sell more books. everyone wants this to work out so it doesn't have to be this end all, you know, black and white battle that goes to courts all the time. it has to be something where they come to an agreement and everybody makes money. >> other big copyright case, but aereo case in the supreme court yesterday, where do you come down on that? >> right. i guess it's bye-bye aereo is what i was reading. content has to be protected.

it's kind of a similar story in that people who write and people who make television shows and networks who put these tv shows on, they have an interest in protecting what they're doing so that they can make their living and live on it. on the other hand, consumers just want everything to be cheaper, cheaper, cheaper, easier, easier, easier. yuck people don't have land lines and don't have television sets anymore. they want to turn on their computer and get everything. there has to be a line drawn somewhere with paying for things. in the end i don't know that much about that in particular but it looks like, you know, watching the -- on tv is still going to exist a little longer. >> hey, ben, brian sullivan. big fan, man, i read "straight flush" last year. i know it's hard for people to feel sorry for current and former fuji tifs, but when i look now at the online gaming in new jersey, elsewhere, and i think about the guise of your book, "straight flush," the

founders of absolute poker. they built this huge empire. feds come down. one is still on the lamb from the law. >> yeah. >> has their business model been justified? do we need to feel bad for these guys? >> i mean, i think it's completely insane that online poker was ever considered illegal or is considered illegal. you know, the government went after these guys. one of them is sitting in antigua. he's a fugitive basically for launching a site that now would be legal in certain states. so it's going state by state, but online poker is coming back. it's a $40 billion industry. so, you know, i think it's crazy that people go to jail for, you know, trying to start an internet company that happens to be about poker, but in the end they knew what they were doing was illegal. in 2006 essentially they should have shut down operations and left the business. instead, they doubled down and that's why they ended up, you know, going on the run. >> ben, your new book "bringing down the mouse," this is your first stab at young adult --

these are young readers. why did you do it? what was the experience like in terms of the difference in writing it? >> it was amazing. "bringing down the mouse" is a group of math science whiz kids who take down carnival games. they're 12-year-olds and they end up going to an amusement park and bring down an amusement park. it turns out you can use math and science to beat most of those fair games, throwing coins at dishes. it can be beat with physics. i wanted to write a kids book. my books are aimed a little older. i ended up writing an encyclopedia brown series. i'm going to launch a series with it. it was incredibly gratifying. i loved talking to kids. >> encyclopedia brown, old school reference. >> old school. >> what's next, choose your own adventure, ben? >> "bringing down the mouse." >> congratulations. good luck with the book. we look forward to seeing you again soon. hope lots of success with it. >> i appreciate it.

good morning, guys. thank you. all right. coming up, his company's cameras, like this one, are perfect for action sports and thrill seekers and -- yup, that's me spinning around, but will investors go forego pro. founder, ceo nick woodman will join becky at the nasdaq in an interview you cannot afford to miss. should be very cool. coming up in 5 minutes here. stick with us.

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nick woodman is going to be joining us and talking about the future of video. this is just minutes away. stick around. "squawk box" will be right back. s about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

welcome back to "squawk box" this morning. we are just seconds away from the initial jobless rates. rick has the numbers of the cme. >> initial jobless claims moved from an upwardly revised 314,000 down back to 312 which is where they started before the revision. so 312,000, technically we are down 2,000. now let's look at continuing 2.57. may come up .4. spending up .2. half is expected. everybody will be watching today. month over month, .2. up 1.8.

expectations. it's only up .2 which is as expected. many, of course, are going to look at these pce numbers because it's janet yellen's favorite. the bigger they get the more she's going to probably ignore them. the problem is rates are moving lower. these are some of the lowest close to, you know, five weeks but pay very close attention to the spread between foods and treasuries. now we're going back to andrew because we have a lot of big things going on on "squawk box" this morning. back to you, buddy. >> yes, we do. thank you, rick. thank you for those numbers. we'll do more analysis with them in a minute. let's get over to becky at the nasdaq for the interview of the morning. becky. >> andrew, thank you very much. we've been talking about it all morning long. go pro flex ipo at $24 a share. that was at the high end of the range. it's going to begin trading on the nasdaq under the symbol gpro. joining us is nick woodman.

nick, it's great to have you here. >> thanks for having me, becky. >> i want to talk to you about numbers. you have an interesting story. i don't know how many of our viewers know about that just yet. it's been a long road to get you here. when did it start, 10 years ago. >> 12. >> 12 years ago. who's counting. this is something that you came up, an idea you came up with when you were off surfing. was it in indonesia? >> i was getting ready for a five-month surf trip around indonesia. >> you were surfing and licking your wounds from a company you had started and it failed. how did you come up with this idea? what happened? >> well, when i was 22 years old i told myself i'd give myself until the age of 30 to make it as an entrepreneur and i did fail at my first business. at the age of 26 i had no inspiration for what to do next and i had four years left on the clock. i decided to take what money i had saved up from my previous

job and go surfing and look for inspiration and in preparation for that trip i had this idea for a wrist camera that i could surf with to document my friends and i on the trip and the irony is that this trip was meant to inspire me for my next business and i had my business idea before i left. >> you came up with the idea that you could put on the end of your surf board, on your wrist, anything to catch what you were doing in action. at the time that was pretty out there. now we all have these phones and things we carry around. it was an out there idea. >> the first go pro was a wrist camera for me to capture my friends surfing. and it took a few years to realize that there are a lot more people in the world that want to capture themselves doing what they want, what they love to do, their passions, their interests, than there are people that want to capture other people. and so the big aha moment forego

pro was enabling the world to turn the camera around on it self and that's led to perspectives of life that was never possible before and incredible content that was never possible. it's a business that's essentially built on our customer shared experiences. >> the original selfie. >> the original selfie. the engaging, immerse sieve, oh, my god that is incredible selfie. >> i love the story because there are so many unusual aspects to it. just how you got the seed money. your wife is here today, jill, and the two of you -- she was your girlfriend at the time. you guys were selling shell covered belts to come up with money to go ahead with this? >> so after three months in australia i flew to indonesia and jill, my wife, came over to meet me and one day she showed up after breakfast wearing this incredible bead and shell belt. i asked her where she got that. i had been out surfing that morning. she told me where she got it, how much she paid for it and the

light bulb went off and i realized, oh, my god, we could sell those for a lots of money back home. we brought 600 or so back. that was part of the initial seed money. >> how much did you pay for them? how much did you sell them for? >> we paid ballpark $1.60 each and depending where we were selling them, anywhere from 20 to $120. >> out of your vw bus. >> 1974 volkswagen. it was pretty fairy tale, real. fabulous start to the whole go pro story, no question about it. >> here we are today. you have what we've been calling a camera company, a gadget company. i know you have much bigger ideas for it. you think this is a media company. >> we think we're a content enabling company. >> which means what? >> we make it easy for passionate people around the world to capture and share incredible life experiences in the form of compelling content. so the one to two-minute edit that they can use to re-live an experience but also share that experience with other people around the world, whether it's

on facebook, youtube, twitter, et cetera. before go pro it was really hard for people to ever capture any footage of themselves doing anything and by simply enabling the world to turn the camera around on it self we have uncorked this massive amount of shared human experience, this massive amount of incredible content. our customers are uploading to youtube alone over 6,000 videos a day, tagged, titled, described as go pro. >> which makes you in the same category as xerox, as kleenex, as i guess google in terms of being a brand in itself and a verb. >> we don't quite have that awareness yet so it's a terrific opportunity for us to grow the business and grow awareness on the backs of our customers' shared content but, yeah, go pro is becoming a -- something of a de facto standard for how somebody captures and shares their life in an engaging and immerse sieve way. we're helping people become better story tellers. the benefit to us, the company, is that all of the passion that

our customers share in their videos gets infused into the brand. it's a marketer's dream but more importantly it's really meaningful because we're helping the world express itself in a way that was never possible before. >> i want to walk through some of the numbers for you in a moment. andrew has a question back in the studio. >> i have two, nick. a huge fan of the product and what you've done. my biggest question actually just about the business is why you don't believe it ultimately becomes commodotized. the reason i ask is i think of the walk man. it had a decade or two run but there were a lot of other electronics companies that came into that space. i get the media side of this, but how do you protect around that? >> well, i think it starts with solving real problems for consumers. people buy solutions, they don't buy things. they don't buy gadgets. so when you say do you make cameras, do you make hardware? absolutely, but that's just the start of enabling great content,

right? they have to have a way to capture it in the first place, but then you have to help people get to that summary edit of an experience so that they can re-live it and share that experience with other people and helping people express themselves, share their life experience, that is an everlasting value proposition to consumers. that's not a fad. and if go pro can make it easier than any other company in the world, make it easier for our customers to share compelling professional quality personal content, that's an opportunity that's never going to go away and so if we can stay at the tip of the curve in terms of enabling our customers in this way, go pro can stay the leader that it is. >> let me ask you. we did have rich galfond here. he's the ceo of imax. when he sat down he goes, wow, go pro, nick woodman, i've been watching them and kicking myself why we didn't do this because

imax has the technology. they've been doing this too. what prevents somebody from imax from getting into this? >> well, anybody can go make a piece of hardware, right, but then they need to attract millions of people to capture and share their lives and give the hardware maker credit for it. and the content that those customers are sharing needs to be engaging enough enough, interesting enough that the rest of the world, the viewing audience, cares to watch it. and that has to go on and virally scale and have the enthusiasm for that company that enabled that content in the first place. all of that needs to be delivered to the market, to the consumer by a really rock star, high energy, compelling brand. and you have to hit each of these points to be go pro. that becomes a taller order because every camera that we

sell, every passionate consumer we enable leads to more compelling content being shared and so it's a snowball of word of mouth, consumer endorsed promotion that becomes increasingly difficult to compete with with each new customer we bring on. >> andrew, i'm sorry. i cut you off. >> one more question about this ipo. it seems a bit unusual in one degree, nick, which it doesn't appear to be a lockup on some of the shares. i know you're selling some into this ipo. can you speak to the thinking about that? >> well, go pro has been around for 12 years now. i call it a 12-year overnight success because a lot of people think we just came out of the blue, and we have almost 800 employees now, many of whom have been with the company for years and years and years. and they've -- they've dedicated a lot of their life and made many sacrifices to make go pro what it is today. they deserve liquidity. they deserve an opportunity to realize some of the benefit of

the hard work they've done. i'm still going to own roughly 1/3 of the company when this is done. we have investors to take care of. ultimately we're excited about the ipo to open up the go pro brand to have a whole new dimension of a customer, investors. our goal is just the same as it is with buyers of our physical product. we hope to exceed expectations and we're working hard every day to do that. >> one thing i did notice in the prospectus, you've had phenomenal growth. you went from $64 million in revenue in 2010 to almost a billion dollars last year. if you look at the numbers that break out, for the quarter that ended march 1st, it was $235 million. it was 255 the year earlier. does that tell us growth is dropping off or what happened there? >> no, that tells you that we gaffed a product launch in q4 of 2012. >> what happened? >> when we introduced the hero 3

camera, revolutionary go pro, twice as powerful as the previous camera, the hero 2, it was the first camera where we did our own firmware work, the software that runs the camera, and we were just late in development of it. we got the camera out late. that means we didn't meet all of the demand over q4 as was needed and that demand rolled over into q1 of 2013 so you had an abnormally large q1. we allowed our customers to over eat a little bit, retailers, distribution channel. they got a little more inventory than they should have so you had a ballooned q1 then you saw q2 come down handily. that's a sign of a fast growing, maturing company. we recovered from that and q1 of 2014 is actually a normalized

q1. we actually hit our internal plan. that's what we intend today do. if you were going to see a sharp dropoff in q 2 of this year like we had last year, i don't think you'll see go pro go public. >> brian has a question from the studio. brian. >> thanks, becky and nick. just a quick question, nick. have you studied the cisco deal for flip? we forget five years ago cisco paid nearly 600 million for flip camera. that was really hot for a while. everyone was using them. it failed. they wrote the whole value off. have you studied to know where they went wrong so you guys don't make the same mistakes? >> absolutely. and we get asked this all the time. and the answer is really straightforward. the use case for a flip camera -- that was a great product back in the day, but it -- its era was before the age of the smartphone, before a traditional camera's functionality and use case was subsumed by the smartphone. how is a flip camera used? it was used by one individual

filming another individual to to something or another thing happening. how is a flip camera used? by one individual to film another individual doing something. it's the exact same use case. as soon as everybody had that solution in their pocket in the form of a smartphone, there was no -- not a very promising future for a device like flip camera. where go pro has thrived in the era of the smartphone is that the use case is totally different. we enable people to document themselves, right, turn the camera around on themselves. and that's just a small tweak but it's made all the difference in the world and it's allowed go pro to be what it is today. go pro has grown up in the era of the smartphone so the concern that is the smartphone going to take us out? we actually work very nicely with it. go pro is a great companion for a go pro or vice versa depending how you look at it. you can use the go pro app to

control the -- go the pro app on the smartphone to control your go pro. they're often out of reach. you can get a livid yes on your smartphone and copy content from your go pro over to smartphone and share it to facebook, twitter, et cetera. it's worked very well together. >> i want to talk about you as an entrepreneur and along the way you ran into some other entrepreneurs. i think you told me one time when you were at qvc selling you ran into sara blakely who is the creator of spanx. is there some common thread between entrepreneurs, something you all share? >> mono maniacal focus. most entrepreneurs who have started their businesses out of their bedroom share an insane personal belief in their ability to pull it off. make no bones about it, it's scary. in the early days i had to have a post-it note by the side of my

bed that read, i am doing this so that every morning i would wake up and that would be the first thing i would see and that would be the first thing i would say to myself during the day. i am doing this. because i had to convince myself i could do it. i think that that's a shared trait and then it's recognizing that the only way you're going to succeed is if you 1,000% dedicate yourself to it, become a monk, if you need to, as i did for a few years, because you know that one day, like today, you're going to wake up one morning and thank the universe that you did this and it all worked out. >> is that the day for you, today? >> that is the day for me every day. >> when you say mano maniacal focus, when you were doing this, building it out of your bedroom, you didn't even leave to go to the bathroom. is that true? >> yeah. i had a -- my room was the

furthest room from the kitchen and i was -- you know, i was a mountain biker and a skier and snowboarder so i had a camelback that i'd wear for sport. i was annoyed that i always had to walk across the whole house to get a drink so i started wearing my camelback at my desk so that i wouldn't need to get up from my desk when i was working and then i also had a sliding door to the outside that made it convenient not to have to walk to the bathroom either. >> do you still have that kind of focus today? >> oh, yeah. absolutely. and so does -- so does the company. >> so what's -- what's next? i know it's tough to see down the road, but if you look a year from now, if you look three years from now, what's go pro look like? what kind of gadgets do you have and what other streams? how do you become more of a media company? >> i think that we're going to see more of what the world is passionate about. we're going to see more

incredible imagery of what's happening on this incredible planet. things like pelicans flying for the first time. people living out their lives and their passions and i think that that is going to make for incredible go pro programming that the rest of the world wants to see. >> when you say programming, you're not necessarily talking about television broadcast of these things. i know you have a youtube channel and i know you've been working with x box, too. what are you talking about from the programming perspective. >> we have a vision of a go pro network, the world brought to you by you type of content captured by our passionate customers around the world and shared on a go pro like platform that we distribute across a series of go pro channels. wherever people are consuming content, we want them to be able to consume the go pro channel. it's great for business, but it's also just fabulous to see

what the world is up to in an authentic way the world captured by the world. so whether you watch your content on x box 360 or x box one, there will be a go pro channel there for you to watch. whether it's apple tv or roku, there's a go pro channel. whether you're flying across the country on virgin american airlines, you can watch the go pro channel. we just think that it makes people feel good to see what the rest of the world is up to. it just happens to be of massive benefit to our business because this type of programming turns consumers on to the fact that this type of capture is possible and, again, they're smart and they relate it back to themselves and their own interests and a certain percentage of the time they run out and buy a go pro and start to share their own content that could make it up onto the go pro channel as well. >> is there anybody that you ever looked at and thought, that's my idol? that's somebody who i would like

to emulate when you were on this journey? >> dietrich matheson. >> who is that? >> the foundser of red bull. the reason why i'm such a fan o is he took this drink and turned it into a lifestyle, and it was all just this creative vision that he had, and then he rallied enough people around him that believed in this, and he has gone on to create one of the most incredible consumer brands in the world that serves as a platform to help passionate humans live out their dreams, and red bull's very focused on athletes and athletic pursuits and helping people realize those dreams, and when you look at the scale of that company and what they've done, and it's all born from one person's creativity, and then the team he's build around him to realize that and at the scale, it's one of the most incredible, in my mind,

brand building examples i've ever seen, and you can see a lot of his playbook in go pro, and he's -- he's, like, one of my heros. >> well, nick, thank you so much for joining us today ahead of the ipo. congratulations on that, and we hope to see you again soon. >> thank you so much. >> thank you. guys back to you in the studio. >> we'll give you a high five by the distance. more from the guest host and first, a look at the stocks on the move ahead of the opening bell. we're back in just a moment. ♪

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. >> north korea is not laughing at the new come by can james franco and rogen. a talk show host and producer drafted by the cia to kill the

north korean leader, and they released a strongly worded statement calling the movie an act of war. it reads in part that the united states administration approves or supports the release of this film, we'll take a decisive and merciless counter measure in response to the statement, seth rogen tweeted, people don't want to kill me for the movies until after they paid $12 for it. >> first off, did they see "team america," if they were going to be outraged about something -- >> right, i mean, did you know that his father hit three holes in one the first time he ever played golf, according to the -- that is a true report from the north korea news. >> the report may not be true. >> you think? we got to go. >> all right. coming up, much more or some much, i should say, 8:55, our guest host, and count down of

the go pro ipo continues on "squawk on the street," and continue to watch cnbc. stop showing that. yes, i spun out. there was water leaking from the back of the engine. we're back after this. ♪

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welcome back. let's get back to the guest host. kevin, we talked about a lot of things you'd like to see the fed do. what i hope you can help us with in the last minute, what you actually think the fed will do over the next six months? >> sure. >> and beyond what they've said. i mean, is there something else you think going on? >> yeah, so i think what they are likely to do is get out of the qe business over the course of the next several months, so by the end of the year, they are out of qe, and then i think interest rates, when they move, will move because they move in financial markets, and the federal reserve will play catch up to that, so to the extent that the economy strength enstr which we hope it does in 12 months, interest rates move up, and the federal reserve has no choice other than play catchup. >> what's the gdp look like? >> i've been stuck in six years with this economy and mix of policies growing at two, two and

a quarter, i don't see it changing much. i don't think the global economy is to the velocity or trade, but, listen, i'm open minded, and i hope it does mostly because half of the economy that do not own stocks need it. >> thank you, brian, thank you for hanging out, and becky back at the nasdaq, thank you for the interviews. join us tomorrow, and "squawk on the street" begins right now. big debut for go pro, looking at the nasdaq this morning where the maker of the best selling video camera in the world is going public. becky talked to the ceo moments ago. we'll cover the bases this morning including the opening trade. good morning. welcome to "squawk on the street," i'm carl quintanilla, and cramer is off today. the market is flat digesting the data, and personal spending is a miss for a second month in a